A century has already elapsed since the sacrifice of Europeâs youth in the mass graves of the First World War . One hundred years seems a lot, and yet it only covers a few generations and a society, that of 1914, very close to our own, with its universities, its libraries, its operas, its theatres and literature, with its parliament, its law courts, and of course its businesses and its banks. The West could then boast of its economic, social and scientific, as well as democratic, achievements.
Of course, the Internet was a long way away but radio had already been invented and print media were already well developed and probably more diversified and less regulated than they are today. Commercial flights were not yet in existence but it was already possible to travel by train and car.
An educated, civilised society in which two countries, France and Germany, at the height of their influence , both of Christian tradition, sharing the same fundamental principles, engage in a disastrous war with weapons of mass destruction of the time. The assassination of the archduke Franz Ferdinand, crown prince and heir to the Austro-Hungarian Empire in Sarajevo on 28 June 1914 is the spark that ignites Europe and enfolds it in a spiral of destruction, the sacrifice of a whole generation, and the material and moral ruin of its civilisation in its name. The wide-scale manipulation of the crowds is the process by which they are caught up in this barbarity in the name of safeguarding democracy or the nation. This is evidenced in a major work of the time, The Thibaults, in which its author, Roger Martin du Gard, speaks through its hero with the following words: âNever has humanity experienced such a spell, such blindness of intelligence!â1 In All Quiet on the Western Front, author Erich Maria Remarque also reveals this descent of humanity as the central character of his novel, a German soldier, claims:
We are burnt up by hard facts; like tradesmen we understand distinctions, and like butchers, necessities. âŠwe are terribly indifferent⊠we are crude and sad and superficialâI believe we are lost.2
They were lost in the trenches, in a horrible and senseless battle. Arenât we also lost today? The indifference, the crudeness, the sadness and the superficiality might also characterise our generations, especially the mercenaries of the financial war .
The Trader, a Twenty-First-Century Mercenary
The following text message exchange between two present-day young mercenaries is an instructive example of this:
- hi
- hi
- itâs death
- david from CS called about skew trades (âŠ)
- Iâm telling you, theyâll smash us to pieces (âŠ), tonight youâll have at least 600M
What can this warlike and simplistic, even trivial jargon possibly mean between two supposedly educated individuals? Is he referring to the notion of death? It is not 600 murders because here death is financial. The 600M refers to $600 million in losses which would eventually reach $6 billion. Are skew trades weapons of mass destruction? Unfortunately, these financial bets based on complex financial derivative products resemble them all too well.
On 23 March 2012, in JP Morganâs London trading room, trader Bruno Iksil, known as the âLondon Whaleâ because of his outsized financial bets, and his assistant Julien Grout realised that their gigantic bets were losing gamble. Their text messages express their despair. Only a year earlier in 2011, Mr. Iksil had successfully bet on the collapse of several American companies. Those bets brought in profits of $400 million for JP Morgan, $32 million of which were in fees for Mr. Iksil and two of his hierarchical superiors.
An additional piece of evidence gives us a more precise description of the frame of mind that exists in investment banks. The author is Fabrice Tourre, the Ăcole Centrale Paris undergraduate and Stanford graduate who was hired by Goldman Sachs at the age of 22. Some of his emails were used by the Securities and Exchange Commission (SEC) which accused this investment bank of taking advantage of its clients, i.e. the bank incited them to buy very dubious mortgage-backed debt securities while at the same time betting on these securities to plummet. Here is an example of his prose:
There is more and more leverage in the system. The whole building may collapse at any time. [âŠ] When I think there was a little of me in the creation of this product [âŠ], the kind of thing you invent saying to yourself: what about creating a machine that serves no purpose at all, that is totally conceptual and highly theoretical and that nobody knows how to price, it is bad for the heart to watch it implode in full flight. It is a little like Frankenstein turning against his inventor.3
An email written by another young man confirms this same state of despair. JĂ©rĂŽme Kerviel, the trader who generated a loss of $4.9 billion for SociĂ©tĂ© GĂ©nĂ©rale in 2007, wrote the following email. âIn a trading room, the ideal modus operandi can be summed up in one phrase: knowing how to take the maximum risk to gain the bank the maximum money. In the name of such rule, the most elementary principles of caution donât count for much.â⊠âIn the midst of the great banking orgy, traders have the same consideration as any average prostitute: the quick acknowledgment that todayâs paycheck was goodâ.4 Since then, he has been convicted whereas his employer was let off scot-free, despite a certain responsibility in spreading the casino economy and the disastrous mentality associated with it.
Finally, Sam Polk, a former trader, brought to light another dimension of the problem. For him, as for a number of his colleagues, money became a drug. Here is an extract from his prose:
Not only was I not helping to fix any of the worldâs problems but I was profiting from them. In my last year on Wall Street my bonus was $3.6 million â and I was angry because it wasnât big enough. I was 30 years old, had no children to raise, no debts to pay, no philanthropic goal in mind. I wanted more money for exactly the same reason an alcoholic needs another drink: I was addicted.5
When reading these emails and testimonials, other features from todayâs society emerge. Within this financial sphere, the central nervous system of the economy, venality or the almost total absence of non-financial values as well as a moral void dominate. The raw cynicism of young disillusioned men or women, addicted to money, fresh out of the best academic institutions, is not only tolerated but almost implicitly encouraged by their employers. At this stage, it should be pointed out that these institutions often take pride in training such brilliant subjects, capable of operating in the trading rooms of the biggest international banks. Universities usually do not encourage and prepare their students to question the social usefulness of the financial sectorâs functioning and to reflect with a critical spirit on the realism of mainstream economic assumptions and models. The large-scale hiring of traders, too often selected and trained to behave like soulless mercenaries, helps these banks to be an active part in todayâs financial war where the stakes of the casino economy6 become weapons of mass destruction7 that shake countries, companies and society at large.
Another characteristic deserves mention. A large part of todayâs society is disoriented, as it is faced with a distressful situation in which there appears to be no way out.
A War Without Borders
Today, the youth of Europe no longer dies en masse in the trenches or on battlefields. Those who do die early owe it rather to road accidents or suicides.8 They are enlisted in this other form of war that is the financial war from which it most often suffers. Depression,9 alcoholism10 and obesity are its ills, and these are the side effects of distress. Its fears: the future and the risks of unemployment and insecurity generated by financial instability. The media confuses todayâs generations by very often displaying as essential what is actually futile, and only addressing the essential in the most futile of manners at best. As they do not have the keys to understand what is truly at stake, the future appears too often as indecipherable and therefore unsettling. Mass underemployment11 has been permanently installed in our society resulting in an increase in job insecurity and a marginalisation of whole chunks of the population. For someone who is unemployed, being excluded from the world of employment means it is impossible to build a life or new horizons. The warlike vocabulary demonstrates the scale of the destructiveness. Over the course of 100 years has the âbattle for jobsâ become a new âbattle of the Marneâ? Probably not, if on the French side the battle of the Marne was a victory, the outcome of the âbattle for employmentâ remains very hazy and there are no winners. The resurgence in economic growth will not lead to economic stabilisation and the massive creation of sustainable jobs.
More generally, all over the world, the financial crisis generated around 30 million unemployed,12 without counting all those who are not included in the official statistics. Increases in labour productivity within the current context of limited growth often have the effect of increasing unemployment instead of creating more free time, as it should be the case in a well-organised society.
This crisis seems to have taken on a permanent nature because the measures taken to supposedly correct financial imbalances do little but extend it. In fact, it is profound and is the result of a global financial war that robs and causes large-scale impoverishment of a large majority of the worldâs population. The financial Moloch requires sacrifices. This conflict is very one-sided, as it is essentially being wag...